Does the Dermani Medspa franchise agreement specify which party bears the cost of mediation?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
"Claims" – all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party incurs in defending itself, including reasonable accountants ', attorneys', and expert witness fees, costs of investigation, proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution, whether or not it has commenced.
MEDSPA®. The Franchisee Group further indemnifies and holds the Franchisor Group harmless against, and agrees to reimburse them for any loss, liability, expense, or damages (actual or consequential)
including, without limitation, reasonable attorneys', accountants', and expert witness fees, costs of investigation and proof of facts, court costs, and other litigation and travel and living expenses, which any member of the Franchisor Group may suffer with respect to any claims or causes of action which any customer, creditor, or other third party now has, ever had, or hereafter would or could have, as a result of, arising from, or under the Franchise [Development] Agreement, the Franchised Business, or the dermani MEDSPA®, but only to the extent such liability relates to actions occurring prior to the Effective Date. The Franchisee Gr
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
Based on the 2025 Dermani Medspa Franchise Disclosure Document, the franchise agreement does not explicitly state which party is responsible for covering the costs associated with mediation. However, the document does define "Claims" as encompassing obligations, damages, and costs incurred by any Indemnified Party in defending itself, including fees for accountants, attorneys, and expert witnesses, in addition to costs related to investigation, proof of facts, court proceedings, travel, and alternative dispute resolution.
Furthermore, the document states that the Franchisee Group is responsible for indemnifying and holding harmless the Franchisor Group. This includes reimbursing them for any losses, liabilities, expenses, or damages, including attorney's fees, resulting from claims or causes of action arising from the Franchise Agreement, the Franchised Business, or the Dermani Medspa. This obligation is limited to liabilities related to actions occurring before the agreement's effective date.
Given the definitions and indemnification clauses, a Dermani Medspa franchisee could potentially bear the costs of mediation if the dispute falls under the scope of claims for which they are required to indemnify the franchisor. However, the FDD does not provide a definitive answer regarding mediation cost allocation in all circumstances. A prospective franchisee should seek clarification from Dermani Medspa regarding the specific conditions under which they would be responsible for mediation costs and whether there are situations where the franchisor would bear these expenses.